Germany: growth forecast is lowered

On Tuesday German government has sharply cut its economic growth forecast for this year and next, citing “external” factors for the revision. It now expects growth this year to be 1.2%, down from its previous estimate of 1.8%. Next year, it expects the economy to grow by 1.3%, down from 2%.

Earlier, the ZEW survey of investment analysts fell for the tenth consecutive month to minus 3.6 points from 6.9 points in September. This follows drops in industrial production, exports, factory orders, and the Ifo business confidence survey.

"As soon as the international environment improves, the competitiveness of German companies will bear fruit and the German economy will return to a path of solid growth," said the nation’s Economy Minister Sigmar Gabriel. According to Mr. Gabriel, for Germany there is "no reason to abandon or change economic or fiscal policy".